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The Sarko-Puto Pact

The European Union should join Russia in creating a counterbalance to the US, Chinese, and Indian economies, Jean-Pierre Thomas, special representative of the French President, Nicolas Sarkozy, on French-Russian business relations, said. Speaking in an interview with Russia’s Vedomosti daily, Mr Thomas said President Sarkozy would present a report in autumn 2011 that would include a plan on creating a common economic area between Russia and France.

Russia has increasingly turned to France in its efforts to forge closer ties with Western economies. During the St Petersburg International Economic Forum in June 2011, Russia and France signed an agreement on the delivery of two French Mistral-class warships to Russia. Negotiations continue for two more similar ships. The Mistrals are amphibious-assault, helicopter-carrier ships, mainly designed for landing troops on thinly defended coasts in offensive operations.

French companies have also set their eyes on lucrative contracts in Russia’s volatile North Caucasus region. President Sarkozy and Russian President Dmitry Medvedev made a joint declaration on “opening up” North Caucasus for business development in May 2011 at the G8 summit in Deauville. The plans were further solidified at the St Petersburg International Economic Forum in June 2011. Investments required were estimated at around USD 15 billion.

Also, Moscow has contracted the French electronics company, Thales, to improve security for luxurious ski resorts being built in North Caucasus. Mr Thomas, who leads French efforts to build economic cooperation with Russia, confirmed the agreement: “The Russian state will guarantee the security of the French investment. It is the sine qua non condition for the firms to go there.” A Franco-Russian joint venture would be created in 2012 to develop the project.